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Senate Tax Chairman Tom Bakk of Cook says he will look at raising taxes on Minnesota's richest residents to increase revenue. (Tribune photo by Don Davis)

State budget outlines emerge

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ST. PAUL -- Minnesota legislators are nearly 11 weeks into their 2009 session, but only now are getting a look at outlines of their main task this year -- writing a two-year budget.

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Lawmakers and Gov. Tim Pawlenty have eight weeks left before the mandatory May 18 adjournment deadline to turn those outlines into a fully crafted two-year budget that paves over a $4.6 billion deficit.

House and Senate Democratic-Farmer-Laborite leaders, who control the Legislature, have announced separate budget plans. Republican Pawlenty offered up his second budget plan Tuesday, taking into account a weakening economy.

Now, comparison of budget plans begins.

But that is not easy; while Pawlenty calls for $32.6 billion in spending for his line-by-line two-year budget that begins July 1, the House and Senate have budget outlines, but cannot deliver a bottom-line budget number.

"It is way too early to answer that," Senate Finance Chairman Dick Cohen, DFL-St. Paul, said. "We have to work through the budget details."

Legislative rules give committees until April 22 to pass their budget bills.

House-Senate conference committees must be done with all budget and tax measures by May 7. That deadline is early enough, in theory, to give lawmakers enough time to rewrite bills if Pawlenty rejects them.

It is obvious major fights are preordained, even between House and Senate Democrats. Differences about what is known about House and Senate budget plans "are not insignificant," Cohen said.

Once conference committees work out those differences, Minnesotans can expect even harsher battles between Pawlenty and the DFL-controlled Legislature -- led by House Speaker Margaret Anderson Kelliher and Senate Majority Leader Larry Poge-iller, both Minneapolis Democrats.

"Kelliher and Pogemiller have their heels dug in on tax increases, and the governor against tax increases," House Minority Leader Marty Seifert, R-Marshall, said.

Reaching budget compromises will be harder than in any of his other dozen years as a lawmaker, he said.

The biggest dispute likely will be over taxes.

DFL senators want to increase state taxes $2 billion, while House Democrats suggest $1.5 billion more. Pawlenty does not want to directly raise state taxes, but he would get $1 billion in new money by borrowing, using a tobacco company lawsuit settlement as collateral.

Democrats refuse to say whose taxes they would raise, but they often say the fairest way would be to increase taxes on wealthy Minnesotans. Senate Tax Chairman Tom Bakk, DFL-Cook, has said "a lion's share" of new taxes would come on the rich, but sales and other taxes also will be considered.

House and Senate leaders say they will leave specific decisions up to their tax committees.

But, House Majority Leader Tony Sertich, DFL-Chisholm, said, "we have had extensive discussion within our caucus," so tax committee members understand their colleagues' feelings.

On his Friday radio show, Pawlenty complained that Democrats won't say how they want to raise taxes.

"The gig is up," he said, "we know you are going to do it."

All three budget plans call for deep cuts in at least parts of the state budget, but, again, in the legislative plans those decisions are to be made by committees dealing with each budget area.

In his Tuesday announcement, Pawlenty said he was trimming 4 percent from the current $33.9 billion budget. He targeted specific programs for his cuts -- as did the House -- while the Senate opted for an across-the-board 7 percent reduction of all state spending.

However, the Senate 7 percent plan could be misleading.

Senate leaders say they have yet to decide how to allocate more than $2 billion in federal economic stimulus money among state programs. For instance, a nearly $1 billion public education funding cut in the initial Senate plan likely will be softened or erased by the federal money.

Pawlenty and House DFL leaders already factored in the federal funds.

The House and Pawlenty's plans keep education funding on at least par with the current budget, while Pogemiller insists education must be cut along with other areas.

Legislative leaders downplay differences between the House and Senate budget plans.

"It is actually good for the process to have different ideas," Sertich said.

Even in a deficit time, he added, "we shouldn't have a deficit of ideas, too."

Those ideas need to be polished by early May, so lawmakers can get their work done on time.

"The decisions don't get any easier the later we go," Sertich said.

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Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.
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